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Australia approves open skies talks

Talks with US could lead to opening of highly protected trans-Pacific air route.

Wed Jan 02 2008 05:33:02 GMT+0000

Australia's Qantas is one of only two airlines currently allowed to fly the trans-Pacific route [EPA]

Under current regulations only Australia's Qantas and US-based United Airlines can fly non-stop between the two countries.

The protected status is highly lucrative for Qantas, which reportedly generates up to a fifth of its profits from the 48 weekly flights it operates on the route.

Repeated requests from Singapore Airlines for permission to fly the route were rejected by Australia's former conservative government.

Singapore Airlines is eager to gain access to new markets in order to offset a growing squeeze on its existing routes from budget carriers.

The newly-installed centre-left Labor government, led by Kevin Rudd, has not yet said if it will change that policy.

A 2006 report for Singapore Airlines said Qantas charged 38 per cent more for flights from Sydney to Los Angeles than on the more competitive "kangaroo route" from Sydney to London, which is operated by several airlines, including Qantas and Singapore Airlines.

Singapore Airlines has estimated that opening the trans-Pacific route to more competition could increase the number of travellers between the US and Australia by up to 8 per cent.

In anticipation of the route opening up, Virgin Blue has already ordered six long-range Boeing 777s for its subsidiary V Australia, with options to buy another six.